INTEREST RATE CONTROL !

 The Federal parliament was considering a law change that would remove some of the laws that govern lending in Australia.  In particular, this would save the four big banks a lot of investigative paperwork in processing loan applications.

It seems insane that the government should be promoting a " Trust the banks " option after a recent Royal Commission found them guilty of all sorts of chicanery, including continuing charging fees to dead customers.  They also chased profits by ignoring their money laundering obligations.

Fortunately, this proposal was struck down when it failed to gain the support of One Nation, sitting on the cross bench.  Its leader, Pauline Hanson  commented that millions of Australians should not be left vulnerable to  predatory banking conduct.

Labor is also opposed to this move and the government would need  the support of three of the five cross bench members to pass the bill.  Apart from One Nation it is also opposed by Tasmanian Jacqui Lambie and independent Senator Rex Patrick from South Australia.

It is vitally important that strict rules apply to the lending of money.  The licensing of Casinos is presently under review and gambling has long been the preserve of " loan sharks " who offer help to losing gamblers at usurious rates of interest.

In recent times we have seen the change from pawnbrokers to what are called " Payday lenders."  Where pawnbrokers lend money on the value of goods offered, this new entity gives cash loans that many vulnerable people can never fully repay.  The government laws cap the rate of interest they may charge.

Another new innovation in the commercial sector is the offer of goods with up to a five year repayment holiday.  This is often acccompanied by the issue of a substantial sum of money on a credit card to spend as the customer pleases.  Often this brings the unwise into financial difficulties.  

It is necessary to have laws in place to govern the lending of money.   Most people have a needs to borrow sometime in their lifetime and they need protection from lenders who offer loans that are cleverly designed " money traps ".   Often repayment shortfalls are simply tacked onto a new loan and over the years a victim owes an incredible sum of money.

Many members of the public are unaware of the pitfalls associated with loans and this has recently become apparent in the marketing of smart phones. Phone companies have been heavily fined for signing pensioners on long term contracts for  phones they are unable to use and with charges for data they don't understand.   The novelty of having such a phone and the profit the seller will gain leads to misrepresentation and fraud.

Common sense dictates that protection laws remain in place.